QD = 2,000 – p QS = 200 + 2p. At

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Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

_QD = 2,000 – p

_QS = 200 + 2p.

At price of Rs. 650, what will happen?

Options:

Excess demand amounting to 150

Excess supply amounting to 150

Excess demand amounting to 250

Excess supply amounting to 250

Correct Answer:

Excess supply amounting to 150

Explanation:

the correct answer is Option 2: Excess supply amounting to 150

At price = 650,

Qd = 2000-p = 2000 – 650 = 1350 and

Qs = 200 + 2p = 200 + 2(650) = 1500.

Supply is greater than demand, that is, excess supply to extent of 150(1500-1350)